Associating Vietnam travel companies: Creating Competitive Efficiency

2010-10-13 (GMT + 7)

According to Vietnam National Administration of Tourism, there are thousands of Vietnam travel companies legally operating in tourism service, of which nearly 800 have business license of international tourism service. However, many of them, which are small and medium sized enterprises, have had a negative effect on the image of Vietnam tourismby offering discounts while lowering service quality to gain competitiveness. As a result, it is necessary to associate the enterprises together to improve competitive efficiency.

Recently, Hanoi travel club organized a trip including around 70 travel companies to conduct a survey in Halong (Quang Ninh province). Since it met enterprises’ desire for co-operation to improve service quality and competitiveness, the trip appealed to many Hanoi travel agencies.Mr Vu Minh Chien of Vinatour company, said: “The Hanoi-Halong tour is not new to tourism companies. Nevertheless, joining the survey trip with other enterprises in Hanoi travel club will help us understand more about each other and co-operate. It is undeniable that each small and medium enterprise often has only one particular advantage; meanwhile, services, especially tourism services, vary. Therefore, what every enterprise wants is to co-operate to maximize the strengths of each one, increase competitiveness and cut cost. Moreover, the survey trip chose fishing village Vong Vieng, a quite new eco-tourism destination in Halong Bay, to diversify tourism products.Actually, even the captain of Song Bien travel ship had to search for the way into this fishing village, since most tourists to Halong only go to some scenic areas and islands. Mr Tang Van Phien, the president of Van Chai co-operative, said: “Vong Vieng fishing village has been an appealing destination for foreign tourists in recent years; tourists are very interested in visiting the village by boat and trying local sea food. Besides, they love to go kayaking, as well as to join discovery tours.”Having studied tourism services at Halong for a long time, Mr Nguyen Sy Hung, the director of Khanh Sinh travel company, one of the popular enterprises specialized in serving backpackers, stated: “The backpacker segment of foreign tourists usually search for tourism service in Vietnam, then tell others. As many backpackers are youngsters with limited income or unemployed but love to explore and experience foreign countries, in some cases they are better than even Hanoians at some issues such as where to eat, how to travel and how to make a bargain at the lowest cost. Therefore, in order to keep prestige with this type of customer, we have to deliver tourism services exactly as promised, which will bring more customers in the end. It also explains why Khanh Sinh is believed to be a good travel agency and has become a popular tourism brand in Ha Noi’s Old Quarter.”Mr Nguyen Sy Hung admitted directly: “Co-operation among Vietnam travel companies is essential, because tourism services vary so much, have different market segments and different types of customer. Thus co-operation will reject “competition by discount and trimming services.” With three ships for accommodation and one ship for travelling the Bay, in addition to the available number of customers, Khanh Sinh also desires to co-operate with others enterprises to diversify products and to improve service quality.”Mr John Manon, a Frenchman with a Vietnamese wife, operating a restaurant at Hue alley (Hanoi), said, “There are many backpackers who afterwards become our partners, introducing other customers to Vietnamese travel companies. They, therefore, understand how to ask Vietnamese travel enterprises to give a discount while the price paid by domestic tourists is unchanged. As a result, foreign tourism companies who pass on customers to domestic travel companies will benefit the most if Vietname travel companies keep competing by offering discounts.”At the side of government, Mr Vu The Binh, Head of the Travel Department under Vietnam National Administration of Tourism, at a recent conference on border travel, admitted: “One characteristic of Vietnam travel companies is that they all compete with each other using discounts. On one hand, Chinese travel companies sell their customers a 3day and 2 night Vietnam tours at the price of CNY 1200, while sell it to Vietnamese partners at CNY 650-670, which is debited, one the other hand. This causes many obstacles for Vietnamese tourism enterprises. Therefore, instead of giving permission to every company to take Chinese customers and compete with discounts, Vietnam National Administration of Tourism has organized a group of 10 Vietnam tourism companies authorized to serve Chinese tourists aiming at maintaining the price, as well as the quality, of services. Tourists have to suffer the greatest loss as they get a lower service quality than what they paid for, leaving Vietnam travel image and Vietnamese tourism enterprises suffering a double impact.”“The travel club is a free, voluntary association of travel enterprises in Hanoi.” said Mr Ung Trong Tu, president of the travel club. As the free association originated from enterprises’ need for co-operation, the club appeals to hundreds of members, both individuals and enterprises. In addition to supporting each other in business, in 2009, the club also held trips to survey travel destinations so that enterprises can understand and introduce them to customers when selling tours; so that they can consider the capability of co-operating with those local areas, and investing and upgrading service quality. With those purposes in mind, the club conducts surveys on the Ha Giang-Con Minh tour and tour to Singapore. Meanwhile, for the 1000 year anniversary of Thang Long -Hanoi, the club will meet groups from everywhere coming to Hanoi, and introduce specialty products of Hanoi to foreign and domestic partners.